2017-10-09

Did the US suffer two mild recessions in 2016?

My spreadsheet is indicating that the US had two short recessions in 2016: 2016 Q2 and 2016 Q4.

Now of course this is really weird, so I want to put it out there just as a way of discussing the data or even finding out why my spreadsheet is wrong. I've checked the data against the FRED data (because data has a habit of being updated) and so far the problem doesn't seem to be my spreadsheet or incorrect cell algorithms.

The way I measure recessions is influenced by three things:

1) That Real GDI should be used instead of Real GDP. (

2) That the data should be adjusted per capita.

3) That the data covers a 12 month period, as opposed to a 3 month period.

The reason for #2 is that it is possible for population to grow faster than the economy, which means that while the economy may grow in absolute terms, the per capita data might show a decline.

The reason for #3 is that recessions are generally long term events that come to a head. Quarterly changes are important to note, but changes over a 12 month period are to be preferred as being more judicious.

I thus measure recessions as being: An annual decline in per capita Real GDI.

So when I punched in the data into my spreadsheet just today, I discovered that 2016 Q2 and Q4 saw annual declines in per capita Real GDI. Considering all my other recession indicators were silent about this, the cart seemed to be in front of the horse.